The Hawaii Employees’ Retirement System has committed $105m (€84m) to non-core real estate.
The pension fund approved follow-on commitments of $40m each to Almanac Realty Investors’ Securities VII and AG’s Core Plus Realty Fund IV, as well as a $25m allocation to Prudential’s Senior Housing Partners V fund.
Vijoy Chattergy, CIO at the scheme, said: “All three of these managers performed well with the previous investments we had made with them, and we are a believer in their strategy with the new funds.”
Hawaii, Chattergy added, had decided against adding any new managers to its real estate portfolio.
Hawaii Employees is one of the first pension funds to commit to Almanac Realty VII.
The fund had previously made a $20m commitment to Almanac Realty VI.
The manager, which declined to comment, is seeking a total capital raise of $1bn for the latest fund, according to industry sources.
Typically unleveraged, the fund will be backed by the manager with a 1% commitment of the total capital raise, or $10m.
With a targeted IRR of 12-14%, all of the capital will be invested in the US.
Almanac will look to provide growth capital for private real estate operating companies and public REITs.
Angelo Gordon will buy existing sub-performing office, retail and industrial assets for its Fund IV, placing a heavy emphasis on the top-15 US markets.
Hawaii had approved a $25m allocation to the manager’s Core Plus Realty Fund III.
Pramerica Real Estate Investors is seeking a $500m capital raise for Senior Housing Fund IV, which will invest in independent and assisted living and memory care.
Hawaii Employees had previously allocated $20m to Prudential Senior Housing Fund III.
Hawaii, which could make additional investments in non-core real estate funds, will be conducting an asset liability study next year, with the help of its investment consultant, Pension Consulting Alliance.
The outcome of this study could change its future target allocation for real estate from its current 7% allocation.
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